U.S. Home Sales Dip 2.8%

Resales of U.S. homes dropped 2.8% in January to a seasonally adjusted annualized rate of 6.56 million, the lowest in two years, the National Association of Realtors said Feb. 28. Economists were expecting a pace of about 6.6 million.

Despite the lower sales, prices remained on an upward trend. The median sales price rose 11.6% year-over-year to 211,000 dollars in January.

David Lereah, NAR's chief economist, said that sales are drifting lower but he does not expect a sharp correction, despite concerns about a bubble in the real estate market. "In the wake of interest rates peaking in November, I expect we are in a bit of a trough that may be followed by a modest rise and then a general plateau in the level of sales activity," he said.

"Existing-home sales should stay below the record levels experienced over the last two years, but they'll maintain a historically high pace," Lereah added.